a.ROIC = EBIT(1-T)/Capital
LL = 2.2 million(1-40%)/11 million = 12%
HL = 2.2 million(1-40%)/11 million = 12%
b.Return on Equity = Income for Equity/Equity Funds
LL = (2.2 million – 0.385)(1-40%)/7.15
= 15.23%
HL = (2.2 – 0.605)(1-40%)/5.5
= 17.4%
c.ROE = (2.2 – 0.99)(1-40%)/4.4
= 16.5%
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